China would reform the price that grid operators pay to hydropower plants for electricity to encourage investment in the industry, the National Development and Reform Commission (NDRC) said in a circular on January 22.&nbsp;<br /> <br /> The price reform would allow hydroelectricity to "reasonably reflect market rates" and allow "the market to play a more decisive role in the allocation of resources", the NDRC said.<br /> <br /> The price reform is likely to mean a rise in the prices paid to hydropower generators to help the country achieve its clean-energy targets.<br /> <br /> The NDRC said prices for hydroelectricity will be based on the average price of electricity that power-grid operators purchase wholesale. The price will also factor in hydropower development costs, it said.<br /> <br /> The price for trans-provincial and trans-regional hydroelectricity generated by newly commissioned hydropower stations will be set based on the average on-grid price of the user area and transmission cost, for intra-provincial based on benchmark on-grid rates, the circular said.<br /> <br /> For hydropower-rich provinces, different benchmark-based on-grid hydroelectricity prices could be applied to high and low water seasons, it added.<br /> <br /> In the past, hydroelectricity prices were regulated by local governments, which set prices based on a formula that also weighed development costs with other factors. That price level, however, was typically lower than the wholesale price of conventional electricity.<br /> <br /> <p> China added 29 GW of hydropower capacity last year, bringing its cumulative capacity to 278 GW, according to the National Energy Administration. </p> <p style="text-align:center;"> <img src="/upfiles/news/image/20140123/20140123141139_1679.jpg" alt="" /> </p>